P R E S S R E L E A S E

Transcription

1 Tel: Corporate Contacts: 2500 McClellan Avenue Fax: Rocco Campanelli Pennsauken, NJ President & CEO Kevin D. Miller Chief Financial Officer P R E S S R E L E A S E RCM TECHNOLOGIES, INC. ANNOUNCES THIRD QUARTER RESULTS Pennsauken, NJ November 5, -- (NasdaqGM: RCMT), a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced engineering, information technology and specialty health care services, today announced financial results for the thirteen and thirty-nine week periods ended. RCM Technologies reported revenues of $46.4 million for the thirteen week period ended, a 12.3% increase over $41.3 million for the thirteen week period ended (the comparable prior year period). Operating income was $2.8 million for the thirteen week period ended, a 56.9% increase over $1.8 million for the comparable prior year period. Net income for the thirteen week period ended was $1.9 million, or $0.15 per diluted share, as compared to $1.1 million, or $0.09 per diluted share, for the comparable prior year period. The Company reported revenues of $144.5 million for the thirty-nine week period ended, a 15.6% increase over $124.9 million for the thirty-nine week period ended (the comparable prior year period). Operating income was $7.9 million for the thirty-nine week period ended, a 56.9% increase over $5.0 million for the comparable prior year period. Net income for the thirty-nine week period ended was $5.1 million, or $0.40 per diluted share, as compared to $3.6 million, or $0.29 per diluted share, for the comparable prior year period. The thirteen and thirty-nine week periods ended reflect an increase to net income of $0.5 million resulting from the reduction of a previously unrecognized tax benefit. Rocco Campanelli, President and Chief Executive Officer of RCM Technologies, commented, I am proud of the results our employees delivered in the third quarter of. We grew operating income by 56.9% over the third quarter of. We also achieved gross profit of $13.2 million, the highest quarterly gross profit in over six years, with all three business segments making significant contributions. Our IT gross margin of 31.0% was the highest in RCM s history. s gross margin of 26.6% improved by approximately 230 basis points over the third quarter of. Healthcare revenues grew by 15.9% over the third quarter of. Kevin Miller, Chief Financial Officer of RCM Technologies, added, We continued to post impressive growth across all three segments. As a result of strong performance and subject to any development that materially impacts cash flow, the Company expects to pay a special dividend of at least $1.00 per share in fiscal. Our Board of Directors continues to look to put a more efficient and better performing capital structure in place for shareholders.

2 About RCM is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced information technology and engineering services. RCM is an innovative leader in the delivery of these solutions to commercial and government sectors. RCM is also a provider of specialty healthcare services to major health care institutions and educational facilities. RCM s offices are located in major metropolitan centers throughout North America. Additional information can be found at The Statements contained in this release that are not purely historical are forward-looking statements within the Private Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. These statements often include words such as may, will, expect, anticipate, continue, estimate, project, intend, believe, plan, seek, could, can, should or similar expressions. In addition, statements that are not historical should also be considered forward-looking statements. These statements are based on assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. Forward-looking statements include, but are not limited to, those relating to demand for the Company s services, expected demand for our services and expectations regarding our revenues, the Company's ability to continue to utilize goodwill, to continue to increase gross margins, to achieve and manage growth, to develop and market new applications and services, risks relating to the acquisition and integration of acquired businesses, the ability of the Company to consummate acquisitions as to which it executes non-binding letters of intent, demand for new services and applications, timing of demand for services, industry strength and competition, initiatives to enhance shareholder value and returns and general economic factors. Such statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors, which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. Risk, uncertainties and other factors may emerge from time to time that could cause the Company s actual results to differ from those indicated by the forward-looking statements. Investors are directed to consider such risks, uncertainties and other factors described in documents filed by the Company with the Securities and Exchange Commission. The Company assumes no obligation (and expressly disclaims any such obligation) to update any forward-looking statements contained in this release as a result of new information or future events or developments, except as may be required by law. Tables to Follow

3 Condensed Consolidated Statements of Income (In Thousands, Except Share and Per Share Amounts) Thirteen Week Periods Ended Revenues $46,382 $41,320 Cost of services 33,221 30,636 Gross profit 13,161 10,684 Selling, general and administrative 9,991 8,584 Severance and other charges - 15 Depreciation and amortization Operating income 2,833 1,806 Other income (expense), net 6 (4 ) Income before income taxes 2,839 1,802 Income tax expense Net income $1,877 $1,142 Diluted net earnings per share data $0.15 $0.09 Thirty-Nine Week Periods Ended Revenues $144,460 $124,929 Cost of services 106,087 92,362 Gross profit 38,373 32,567 Selling, general and administrative 29,488 26,251 Severance and other charges Depreciation and amortization Operating income 7,896 5,034 Other (expense) income, net (19 ) 74 Income before income taxes 7,877 5,108 Income tax expense 2,780 1,536 Net income $5,097 $3,572 Diluted net earnings per share data $0.40 $0.29 Summary Consolidated Selected Balance Sheet Data December 28, Cash and cash equivalents $8,305 $9,317 Accounts receivable, net $60,529 $55,726 Total current assets $79,052 $72,704 Total assets $94,340 $86,524 Total current liabilities $26,094 $24,739 Total liabilities $27,166 $25,146 Stockholders equity $67,174 $61,378

4 Condensed Consolidated Statements of Cash Flows Thirteen Week Periods Ended Net income $1,877 $1,142 Adjustments to reconcile net income to cash provided by operating activities 1, Changes in operating assets and liabilities Accounts receivable (1,609 ) (5,453 ) Transit accounts receivable (2,602 ) 500 Prepaid expenses and other current assets 1, Accounts payable and accrued expenses (2,798 ) 2,790 Transit accounts payable 198 (855 ) Accrued payroll and related costs (931 ) 1,599 Income taxes payable Total adjustments (4,600 ) (200 ) Cash (used in) provided by operating activities (2,723 ) 942 Net cash used in investing activities (616 ) (219 ) Net cash provided by financing activities Effect of exchange rate changes (169 ) (21 ) (Decrease) increase in cash and cash equivalents ($3,306 ) $854 Thirty-Nine Week Periods Ended Net income $5,097 $3,572 Adjustments to reconcile net income to cash provided by operating activities 3,578 1,251 Changes in operating assets and liabilities Accounts receivable (5,645 ) (11,055 ) Transit accounts receivable (2,984 ) 4,641 Prepaid expenses and other current assets (426 ) 682 Accounts payable and accrued expenses (968 ) 5,178 Transit accounts payable 3,115 (6,180 ) Accrued payroll and related costs (882 ) 1,764 Income taxes payable Total adjustments (3,913 ) (2,832 ) Cash provided by operating activities 1, Net cash used in investing activities (2,023 ) (1,030 ) Net cash provided by financing activities Effect of exchange rate changes (465 ) (58 ) Decrease in cash and cash equivalents ($1,012 ) ($74 )

5 Summary of Selected Income Statement Data Thirteen Week Period Ended Revenue $24,835 $14,405 $7,142 $46,382 Cost of services 18,239 9,941 5,041 33,221 Gross Profit $6,596 $4,464 $2,101 $13,161 Gross Margin 26.6 % 31.0 % 29.4 % 28.4 % Thirteen Week Period Ended Revenue $22,000 $13,156 $6,164 $41,320 Cost of services 16,660 9,649 4,327 30,636 Gross Profit $5,340 $3,507 $1,837 $10,684 Gross Margin 24.3 % 26.7 % 29.8 % 25.9 % Thirty-Nine Week Period Ended Revenue $75,615 $44,076 $24,769 $144,460 Cost of services 57,695 30,734 17, ,087 Gross Profit $17,920 $13,342 $7,111 $38,373 Gross Margin 23.7 % 30.3 % 28.7 % 26.6 % Thirty-Nine Week Period Ended Revenue $63,263 $41,378 $20,288 $124,929 Cost of services 48,562 29,706 14,094 92,362 Gross Profit $14,701 $11,672 $6,194 $32,567 Gross Margin 23.2 % 28.2 % 30.5 % 26.1 %